Speaking at annual Nassau Conference, the Hon. Hope Strachan, Minister of Financial Services, told delegates “I want to make it absolutely clear that the Government of The Bahamas is fully committed to maintaining a Trustworthy, Competent and Compliant jurisdiction. We will not tolerate the use of The Bahamas financial services sector as a conduit for the conducting of illicit or illegal activities.

“We are keenly aware of the challenges faced by International Financial Centers globally and the efforts to undermine the importance of small, successful financial centers like the Bahamas as well as some of our regional counterparts. Some of these challenges are blacklisting, and de-risking in correspondent banking despite the individual and collective adherence of countries in the region to comply with global regulatory initiatives in anti-money laundering, corruption, the countering of financial terrorism as well as the tackling of tax evasion. Global connectivity has increased the need for heightened security and effective controls to mitigate against financial risks

“And, while The Bahamas continues to demonstrate its cooperation and commitment, and while our current position and strengths are widely recognized, our country’s position as a respected and trusted international offshore financial centre is constantly being challenged and threatened. Now more than ever, we must not be discouraged, we must continue to display the resilience and strength that has brought us this far.”

The Minister added The Bahamas has always been committed to complying with international best practices. “In its phase two ‘Peer Reviews’ by the Organization for Economic Cooperation and Development’s (OECD) Global Forum the Bahamas was in fact, deemed “largely compliant” with the OECD’s existing standard of exchange of information on request,” said the Minister.
Some of the key outcomes of the Bahamas’ regulatory reforms are that:

1. In 2000 The Bahamas eliminated bearer shares;

2. Since 2001: Requirement for the filing of a register of directors and officers for all companies at the registrar general department;

3. The law mandates that financial institutions have Know Your Client (KYC)/Client Due Diligence (CDD) as well as Counter Financing of Terrorism (CFT) policies and procedures in place. Further, regulators have issued guidelines to industry outlining best practices for verifying customer identity and for developing anti-money laundering procedures and measures to prevent terrorist financing;

4. Suspicious Transaction Reporting (STR) for the filing, reporting and investigating of STRs is outlined in a regulatory framework;

5. The Regulators conduct independent inspections and regulatory examinations of financial service providers including corporate service providers for compliance with AML/CFT laws;

6. The 2000 legislative restructuring included the Evidence (Proceedings in Other Jurisdictions) Act and the Criminal Justice (International Cooperation) Act. The former regulates cooperation by Bahamian courts in civil matters while the latter regulates such cooperation in criminal matters.
The Minister also commented on a recent article by The Economist Magazine which painted the Bahamas in an extremely negative light as a “tax Haven” and a safe place for “undeclared funds.”

“Aside from the misrepresentations in the article about The Bahamas which are obvious, the article purports to represent the OECD’s view that The Bahamas, by choosing the bilateral approach to AEOI/CRS and the 2018 implementation date is dragging its feet to obtain competitive advantage and to attract unclean money to our shores. Nothing can be further from the truth. The Bahamas could only choose the bilateral approach and a 2018 implementation date because it was a genuine alternative offered by the OECD.
“The choice was made after careful consideration of all of the facts and circumstances relative to the jurisdiction, our economy and tax regime. Moreover, the decision was made with a clear understanding that the bilateral approach allowed us to adhere to all of the overarching principles and objectives of the OECD relative to automatic exchange of information and the common reporting standard.
“It stands to reason that if there was no alternative approach to signing onto the multi-lateral convention The Bahamas would not have been able to make such a choice. The discontent and outright attack on The Bahamas for having made the choice is not only disingenuous but extremely unfair. Could it be that a choice is not really a choice? Other countries have chosen the bilateral approach, but are not being targeted for negative ridicule for having done so.”